“Complexity is not a solution. It’s a smokescreen.”
— Steve Conley
In July 2025, Donald Trump signed an executive order opening the door for U.S. 401(k) retirement plans to invest more heavily in private markets. On the surface, it’s sold as “democratisation”—letting everyday investors access the same high-return opportunities as institutions.
But beneath the rhetoric, this marks yet another dangerous pivot in global pension policy—one that risks eroding the savings of millions while enriching the financial industry.
Let’s be clear: private markets are not suitable for retail investors.
🧱 The Myth of “Democratising” Private Markets
For decades, we’ve heard that unlocking private equity, venture capital, and infrastructure projects for the masses is a leap forward. In reality, it’s a Trojan horse for higher fees, reduced transparency, and greater systemic risk.
As Leyla Kunimoto aptly warns:
“Private markets are ridiculously opaque. Which, in a twisted way, might help you sleep at night—because if you saw what’s under the hood, you probably wouldn’t.”
This is not about inclusion. It’s about distribution—or rather, the redistribution of financial risk to those least equipped to carry it.
⚠️ What’s Really Going On?
Private markets were once the playground of institutional investors who could afford to lock away capital for decades and stomach uncertain returns.
Now, as government policy shifts toward funding domestic infrastructure and public debt, pensions are being weaponised to foot the bill.
In the UK, similar plans are afoot. Rachel Reeves’ Mansion House reforms seek to channel Defined Contribution pensions into Long-Term Asset Funds (LTAFs) and “megafunds,” in the name of growth and productive finance.
But the questions are stacking up:
- How do we model risk when data is sparse and valuations are murky?
- What happens when liquidity dries up in retirement?
- Who truly benefits from the fee structures and opacity?
🧮 The Simplicity Dividend
The answer, for most savers, is not more complexity. It’s clarity. It’s transparency. It’s discipline.
And above all, it’s this:
Keep it simple — and boring.
Investing doesn’t need to be adventurous to be effective. A well-diversified, low-cost, transparent portfolio—built on public markets—is still the most powerful way for individuals to build and preserve wealth over time.
Index funds. Automatic rebalancing. Risk-adjusted drawdown strategies. These tools work. They’ve stood the test of time. And they don’t hide behind “volatility laundering” or obscure valuations.
💡 Human Capital Over Financial Alchemy
At the Academy of Life Planning, we believe wealth isn’t measured by your exposure to complex instruments—it’s measured by your freedom to live purposefully and securely.
True financial empowerment begins not by chasing illiquid returns, but by understanding your human capital: your ability to learn, earn, adapt, and lead.
Don’t be dazzled by the sales pitch of “exclusive access.” If you can’t easily explain what you’re invested in—or when you’ll get your money back—it’s probably not for you.
🔄 From Deregulation to Extraction
This shift to private markets isn’t new. It’s the next chapter in a longer saga where governments seek growth, and the industry seeks yield—but at the expense of the end investor.
As JB Beckett notes (see further reading), the UK is entering another cycle of deregulation under the guise of “value for money.” But with charge cap exemptions, bundled performance fees, and obscure life-styling transitions, we’re not simplifying investing. We’re re-complicating it.
And once again, the burden will fall on the least advised and most vulnerable.
✊ What We Stand For
- Transparency over opacity
- Simplicity over sophistication
- Empowerment over intermediation
At the Academy, we call it “replacing extraction with empowerment.” It means putting your future back in your hands—not handing it to private equity managers who charge 20% carry.
✅ Take Action: What You Can Do Today
- Review your pension holdings. Are they in low-cost, publicly traded investments you understand?
- Avoid opaque funds with high fees. Ask about liquidity, valuation methods, and exit strategies.
- Embrace human capital. Invest in yourself—skills, education, and autonomy—not just financial products.
- Speak out. If you’re a planner, adviser, or trustee, raise the alarm on this shift. Defaulting savers into illiquids is not progress.
🧭 Closing Thought
Pensions are not a playground for financial innovation. They are lifeboats for later life. The more we load them with untested strategies, the more likely they are to sink under pressure.
So next time someone offers you access to the “sophisticated” world of private markets, remember: the best portfolios are built not on hype, but on humility, evidence, and simplicity.
And yes—they’re boring on purpose.
Further reading:
Yo-yos for the long haul: JB Beckett gets down to detail as he asks whether or not the changing rhetoric around ‘value for money’ means money for nothing for advisers and pensions?
Guest insight: The boom and bust of regulation cycles. A fascinating journey through regulation as JB Beckett reminds us of the value of Caveat Emptor
Private markets | A hard sell, but, asks JB Beckett in his latest guest blog, are distributors confusing ‘democratisation’ with liberalisation?
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